Courting Trouble

Michigan’s no-fault law for auto accidents was designed to ensure that accident victims will be compensated by insurance for appropriate expenses they may incur as a result of the accident—including medical expenses, lost wages and benefits, replacement services and any legitimate long-term or specialty care that may be required.

The frustrating reality, for many accident victims, is that the compensation process does not always go as smoothly as it should. For a wide range of logistical, legal, procedural and medical reasons, a significant number of claims are denied, and victims whose health and wellbeing may depend on those payments are left with few viable options. While some of the reasons for a claim denial or cessation of insurance payments may be valid, many others are clearly spurious and just a thinly disguised pretext for non-payment. When legitimate claims are delayed or denied, the only recourse for victims and their attorneys is to go to court.

That process can be complex, confusing, and can take far longer than some might expect. For all of its many admirable qualities, the wheels of the American justice system can turn remarkably slowly. Understanding how the litigation process works—what to do, what to expect and how to best navigate an arduous litigation process—is critical for accident victims and their families.

Move quickly

If the insurance company has stopped paying your benefits, you may have already recognized that you need an attorney. But what you may not realize is how quickly you need to move. Because one of the first and most important things to recognize in a no-fault case is that you have a very limited amount of time.

In a traditional third-party auto accident claim, the victim has three years to bring a lawsuit. But in a no-fault claim, you have to bring your lawsuit within one year of having incurred the expense(s) in question. A year might sound like a long time, but consider the circumstances. If you receive treatment at a hospital, you might not get your bill until two or three months later. When you submit that bill to the insurance company, they will almost certainly state that they need to investigate the claim—something the law requires them to do within 30 days. Despite that requirement, the 30-day window is almost never honored. The investigation might take six months or more. All this time, your one-year clock is ticking. In some cases, claimants may not have even received a formal claim denial, and they have no other choice but to file suit. Waiting beyond the one-year window will get your suit dismissed. So: when in doubt, file.

Discovery and delays

Once a lawsuit is filed, the insurance company/defendant has a specific period of time to answer the complaint (that time period varies, but is typically about a month). Expect that full month to go by before things move forward. Once the defendant and their attorneys deny the complaint, both sides enter into a period of Discovery—a legal term for a process during which opposing sides in a lawsuit learn about each party’s theories and defenses, gather and exchange evidence, solicit testimony, secure expert witnesses, etc. This is where the plaintiff and their attorney explain why they think they’ve been wronged and to lay out the facts in the case (What compensation was paid? Why or why not? If full benefits have not been paid, why not? What reason was given?). Most of this information is exchanged and obtained under oath through deposition testimony and written discovery—with witnesses’ subject to perjury penalties for any falsehoods.

Unfortunately, even the most basic facts of the case are often disputed by the insurance company. No-fault insurance companies will frequently respond to even the most innocuous “request to admit” (a legal tool that allows both sides to stipulate certain basic facts they can all agree on) with a reply that essentially says, “I don’t know.” It’s a frustrating reality that they are incentivized to deny, delay and muddy the waters as much as possible. Because they typically have about a month to respond, with typical delays it may be several months into the discovery process before even basic questions are ever answered.

Getting answers

If sufficient information isn’t provided in discovery, your attorney may have to file a motion with the court. The defendant has seven days to answer the motion. If the answer is still not sufficiently clear or detailed, another hearing may be required and the judge will potentially order more thorough answers. The defendant may ask for and receive more time. At the end of that period, they might then file an objection stating that they shouldn’t have to provide that information—and that requires more time in front of a judge. Before you know it, you can be six months into the process and your basic questions still haven’t been answered.

Settle in

Most cases end up settling before going to trial. The Case Evaluation process is an effort by the courts to try and resolve cases by presenting an abbreviated version of the case to a panel of three attorneys. The panel will review the presentation and a written summary and respond with a proposed dollar value for settlement. Both parties have 28 days to accept or reject the award. If both sides accept, the suit is resolved. If one or more rejects, the suit moves forward. Even if this process fails, the judge will likely encourage both sides to settle before trial—either through a voluntary or court-ordered facilitation process.

Trial and appeals

After Discovery and if settlement has failed, the next step is trial. It may be a bench trial (before a judge) or a jury trial if requested by one or more parties. In some cases, the determination of whether the insurance company should pay the victim may also include any interest that has accrued in the interim and any attorney fees that may be owed if the insurance company is found to lack a reasonable basis for the denial and subsequent delays. But even a trial may not be the end of your case. The appeals process—first to the Michigan Court of Appeals and then the Michigan Supreme Court—could mean that the final resolution for some accident victims could be years away. Given the complexities and delays of the litigation process, victims and their families would be wise to protect their rights by working with an attorney with demonstrated no-fault experience. On the long and twisting road to recovery and reimbursement, a trusted guide is essential.